Central GoldTrust (GTU) Announces $161.3 Million Underwriting Agreement

October 28, 2011 9:09 AM EDT
Central GoldTrust (NYSE: GTU) of Ancaster, Ontario announced today that it has entered into an underwriting agreement with CIBC World Markets Inc., as lead underwriter, and Credit Suisse Securities, Inc., under which the Underwriters have agreed to buy and sell to the public in Canada and in the United States under the multijurisdictional disclosure system, 2,375,000 Units of Central GoldTrust.

The Underwriters have been granted the right to increase the size of the offering by up to an additional 300,000 Units, exercisable in whole or in part, at any point prior to 4:00 p.m. (EST) on October 28, 2011. The offering will be made under an initial prospectus supplement to Central GoldTrust's US $1,000,000,000 base shelf prospectus dated October 11, 2011.

The purchase price of U.S. $67.90 per Unit is expected to result in gross proceeds of approximately U.S. $161.3 million, prior to the exercise of the Right. Substantially all the net proceeds of the offering have been committed to purchase gold bullion for settlement at closing, in keeping with the asset allocation provisions outlined in Central GoldTrust's Declaration of Trust and the related policies established by its Board of Trustees. Any additional capital raised by the offering is expected to assist in reducing the annual expense ratio in favour of all Unitholders of Central GoldTrust.

Closing is expected to occur on or about November 4, 2011.

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